Sky Talk

Corporate travel is up 5.5 percent in 2010, will keep increasing in 2011, survey says

Business travel is back.

A new survey by the National Business Travel Association found that the average corporate travel budget was up 5.5 percent in 2010 compared to last year and will grow another 4.45 percent in 2011.

"Given the difficulties the industry faced during this last recession, corporate travel buyers welcome the improved conditions, and companies are already getting their teams back on the road to help build business," said Craig Banikowski, NBTA chief executive.

The report surveys 170 North American corporate travel buyers and found that 72 percent of them feel the business travel industry is better today compared to one year ago and another 63 percent believe it will improve over the next 12 months.

However, while corporate travel buyers are spending more this year, the survey found it is not because there are more business travelers. Instead, the rising budget is due to an increase in airline fees, higher fares and higher hotel rates.

"As the economy continues to improve and both domestic and international costs rise, we will see airlines and hotels wield more negotiation power," Banikowski said. "Many travel buyers are already experiencing more strict market thresholds and expect this to result in smaller corporate discounts going forward."

-Andrea Ahles

New date set for APFA, NMB meeting

I just got an e-mail from the Association of Professional Flight Attendants, saying that their meeting with the National Mediation Board was rescheduled for Tuesday, October 19 in Washington D.C.

Just like the previously scheduled meeting on September 20, which was canceled at the last minute, only the APFA negotiations team and federal mediators will meet. American Airlines' negotiations team is not invited to this particular session.

American's contract negotiations with their flight attendants union have been hold since this past spring when talks broke down over pay and work rules. After the May session did not produce a tentative agreement between the two parties, federal mediators decided to wait and see how other American union groups - mainly the mechanics - voted on a tentative agreement before returning their attention to the flight attendants.

The mechanics and store clerks groups at American both voted down tentative agreements in August, while maintenance technicians approved a contract with the Fort Worth-based carrier.

Some industry experts that I've talked to in the past month say they don't expect federal regulators to declare an impasse in talks between American and its flight attendants as the holiday travel season is getting closer. It is unlikely, they say that the Obama Administration would want to deal with a possible airline strike in the November/December timeframe.

-Andrea Ahles

More upgrades for the B-52

In the category of "they don't build them like they used to," Boeing Co. was awarded a $11.9 billion Air Force contract for ongoing weapons systems upgrades for B-52 Stratofortress bombers over an eight year period.

Boeing has been building, maintaining and upgrading the B-52 since the mid-1950s. The last of the B-52H models now in use rolled off Boeing's Wichita, Kan. assembly line in 1963.

- Bob Cox

 

 

 

A few more opinions on Southwest-AirTran deal

The aviation community is still buzzing about Monday's announcement that Southwest Airlines will be purchasing AirTran Airways.

Here's what a couple of the experts have to say about the proposed deal:

Jamie Baker, analyst at Goldman Sachs says "The industry continues to consolidate around three Legacy behemoths, one Southwest . . . and a hand full of stragglers. We don’t believe Southwest-AirTran warrants an immediate competitive response from the likes of an AMR, though we do wonder whether JetBlue, Spirit, and Virgin might view their standalone prospects differently today versus this time last week."

Stifel Nicolaus analyst Hunter Keay - who had previously mentioned a possible Southwest-Sun Country deal as beneficial to Southwest - said he does not expect Southwest to operate the Boeing 717s that AirTran has for very long.

"We note 80 of the 87 B717 aircraft are on operating leases that should roll off gradually over the next five years – we expect LUV to operate these aircraft with LUV colors and cabin configuration before they are ultimately phased out. We would be surprised if LUV terminates the operating leases early, as the B717 aircraft (117 seats) is valuable in smaller markets where a larger B737 (137 seats) would likely dilute pricing. Further, we note LUV's 737-500 aircraft has 122 seats, which could actually turn out to be a smaller aircraft compared to the B717 on a per seat basis after LUV eliminates AAI's first class section," Keay said in a research note on Tuesday.

Bill Swelbar, MIT researcher and airline analyst, says he doesn't expect Delta Air Lines or US Airways to feel threatened by the Southwest-AirTran deal since the legacy carriers already compete with low cost carriers for about 85 percent of their domestic revenues.

"If you ask me, the losers in this announcement are not the network carriers but rather Frontier and Spirit.  jetBlue will survive just fine.  But Frontier is now confined to one [maybe two] traffic base for all intents and purposes.  And that makes them vulnerable.  As for Spirit, which just announced its intentions to launch a $300 million Initial Public Offering, it is one thing to have a highly fragmented market competing inside their network.  It is a totally different animal to have Southwest and AirTran focused on carrying traffic to the Caribbean," Swelbar blogged.

Over on BNet.com, Brett Snyder (also known as the Crankyflier), opines that a culture clash could be the biggest challenge Southwest faces in this merger.

"Southwest has a very unique culture. Just go for a spin around the headquarters building filled with framed pictures and you’ll pick upon the quirkiness right away. It’s a good quirkiness, but it’s not something you’ll find at another airline. Even if AirTran had stellar customer service (something I haven’t experienced), it still won’t be easy to bring the workgroups together and get the AirTran folks to fully buy-in to the Southwest way of doing things," Snyder wrote.

And to show that they still have a sense of humor, even though they're working on a $1.4 billion merger, I got a nutty press release from Love Field today, talking about hazelnut creamer for Southwest's in-flight coffee. Of course, there is also the annual Texas-OU plane pull out at Love Field, scheduled for Thursday, where fans of each team will compete to pull a Southwest plane the farthest. Knowing the folks over at Southwest, a video of the plane pull will probably be up by the end of the day.

-Andrea Ahles 

Rescue helo pilot speaks his mind

For you helicopter folks and just general fans of military aircraft and military procurement out there, there's an interesting item today in the Lexington Institute's Early Warning Blog.

Lexington's Loren Thompson, chief operating officer and consultant to defenese contractors, gets taken to task a bit by Roger "Sprout" Wentworth, a retired Air Force combat-search-and-rescue helicopter pilot, for Thompson's criticism of USAF for choosing to buy a new generation of HH-60 Pave Hawks instead of V-22s or the AgustaWestland EH-101 as the next CSAR helicopter.

It's interesting commentary from a guy who, as they say, been there, done that and most likely been shot at while doing it. And kudos to Loren and company for letting Wentworth air his views on their site. This, by the way, is Loren's original post on the HH-60.

- Bob Cox

 

 

Another view of Eurocopter's new bird

 

Eurocopter sent us another picture of its X3 twin-engine, hybrid helicopter in flight. Thought we'd post it for all to see.

- Bob Cox

Bell/Northrop unmanned copter progressing

Bell Helicopter and Northrop Grumman have moved closer to achieving a planned first flight of their Fire-X unmanned helicopter before the end of 2010.

The integration team working at Bell's Xworkx facility in Arlington turned on the power to the main computers and associated subsystems of the aircraft for the first time Sept. 17, the companies said in a release.

Fire-X is an unmanned helicopter, based on Bell's commercial 407 helicopter, that is being developed to demonstrate the ability carry military cargo either internally or externally over extended distances.

"The Fire-X 'power-on' sequence, which validates the integrity of the electrical system, went exactly as planned," said George Spongberg, Northrop Grumman's Fire-X program manager. "It confirmed that the air vehicle's vehicle management system has been configured properly, and that all of the air vehicle's new wire harnesses are delivering power at the right levels to all of the major subsystems."

The wire harnesses were produced, tested and installed by Bell.

The power-on event follows four months of modifications at Xworx to convert a 407 from a piloted vehicle into an unmanned or optionally piloted vehicle. The modifications included not only removal of non-mission-essential equipment such as seats and sound insulation, but also installation of new wire harnesses and avionics required to control the vehicle in an unmanned configuration.

Over the next month, the Northrop Grumman/Bell Fire-X team expects to conduct preliminary flights of the aircraft in a manned configuration to validate its control system, then convert it back to an unmanned system. After completion of ground testing and engine runs, the air vehicle will be ferried, in an optionally piloted configuration, to the Army's Yuma Proving Ground, Ariz. for final testing before Fire-X's first demonstration flight in an unmanned configuration.

Fire-X claims to offer a useful load of more than 3,000 pounds – for fuel, payloads and/or cargo. That load can typically support intelligence, surveillance and reconnaissance missions up to 16 hours long, or cargo missions of 2,500 pounds out to a range of 110 nautical miles.

Detailed information about the Fire-X is available here.

- Bob Cox

Navy places big orders for F/A-18s

The Navy today awarded Boeing a $5.3 billion multi-year contract for production of 124 F/A-18 E/F and E/A-18G model fighter and attack jets, an order that had to be placed by theend of the government's fiscal year before Congressional authorization for the purchase expired.

The order is for 46 F/A-18Es, 20 F/A-18F and 58 E/A-18G aircraft, latter the Navy's radar jamming/electronic warfare jet. The aircraft are to all be delivered by May 2015.

A second $249 million contract was awarded Boeing for logistics support and associated materials for the F/A-18E/F aircraft for the Navy and Australia.

- Bob Cox

GE-RR have problem with alternate F-35 engine

General Electric and Rolls Royce, already fighting an uphill battle to maintain DoD funding for the F136 engine, the alternate engine for the F-35 Joint Strike Fighter, have run into a non-political problem. GE and Rolls put out the following statement a few minutes ago:

Approximately three hours into a mechanical check-out on September 23 at the GE Aviation facility in Evendale, Ohio, an F136 development engine experienced an anomaly at near maximum fan speed.

Engine #008 was shut down in a controlled manner. Initial inspection revealed damage to airfoils in the front fan and compressor area. The engine is currently being disassembled for a thorough investigation.
 
The GE Rolls-Royce Fighter Engine Team is researching the manufacturing and assembly records for engine #008, an endurance engine in the development program.
 
The Fighter Team has run several builds of five F136 development engines for more than 1000 hours since early 2009 without experiencing this issue.

 GE/Roll-Royce promptly inspected two other development engines now running in the program and neither engine exhibited similar distress. Prior builds were also inspected with no findings.

- Bob Cox

Airline traffic continued to grow in August but at a slower rate than in July, the International Air Transport Association reported.

Passenger volumes for international scheduled traffic were up 6.4 percent in August iover a year ago and cargo was up 19.6 percent.

The August figures are down from July when passenger traffic increased 9.5 percent and cargo was up 23 percent.

“The rapid improvements in demand that we saw earlier this year are behind us," said Giovanni Bisignani, director general and CEO of IATA. "The slow down of demand in August is consistent with our forecast for a tougher end to 2010 as government stimulus monies run out without having generated significant improvements in employment. The bounce from re-stocking is over. We do not yet see the strong consumer confidence needed to sustain the expansion with spending.”

- Bob Cox